AI voice recognition startup lays off another 20% amid difficult financing conditions due to high Intrerest Rate environment.

Recently, an artificial intelligence startup focused on voice recognition software announced it would lay off about 20 employees, accounting for 20% of its total workforce. This is the company's second round of layoffs this year. The company's CEO stated that the main reason for the layoffs is the high Intrerest Rate environment that has led to reduced funding for startups.

Founded in 2015, this company has received support from several well-known investment institutions. Currently, the company is facing fierce competition from open-source voice recognition software and tech giants.

In the layoff notice sent to employees, company executives mentioned the difficulties in the startup financing environment, macroeconomic challenges, and the company's performance over the past year. The employees being laid off include data scientists, researchers, and engineers.

Although this round of layoffs has not attracted widespread attention, it reflects the considerable pressure that AI startups are facing in this rapidly changing era.

The company's CEO stated in a statement: "Considering the Federal Reserve has signaled that 'high Interest Rates will persist for a longer time', we must adopt a conservative strategy, control cost growth, and focus on the company's efficiency."

Although the company has just experienced "the best quarter" in its entrepreneurial history, the CEO refused to disclose specific revenue figures. Last autumn, the company announced it raised $47 million, bringing the total funding to $86 million including the financing from 2021, with a company valuation of $267 million.

Despite many private software startups laying off employees over the past year, the AI sector has remained a highlight for entrepreneurial financing. However, as more companies enter the market, some previously high-performing AI startups are beginning to face challenges.

For example, an early leading company in the generative AI field had to cut its revenue expectations after facing strong competition, and its two co-founders also resigned last month.

The challenges faced by this voice recognition company also reflect the potential impact of open-source software on proprietary AI. Although open-source large language models are currently not as powerful as proprietary models, the gap is gradually narrowing.

Unlike large language models, speech recognition software has been commercialized for decades and is widely used through various voice assistants. The company provides speech recognition services for enterprise clients, claiming that its solutions are more accurate, faster, and better suited for business operations than existing options.

However, as tech giants and other startups launch similar products, coupled with enterprise clients beginning to cut software spending budgets, it has become increasingly difficult for software providers to gain new business.

In the face of these challenges, the company's CEO remains confident that they can cope with the competition due to their higher and more precise product quality. He also believes that the entry of new competitors helps the entire industry understand the potential of AI voice recognition software.